A lot of people have questions regarding the fossil record and how it squares up with creation and evolution. Terms like "transitional forms" can cause a lot of confusion, primarily because they are used in different ways by different people. Anyway, I wanted to take this post to look at the fossil record from a high-level view, and point out how this relates to creation and evolution. This is the first post in a series on this topic. They will probably build on each other, so it will be a good idea to take them in sequence.
In evolutionary theory, at least with natural selection, the way in which organisms diverge from each other is by gradually accumulating differences. (ref 3) As more and more differences accumulate between species, they become more different, eventually becoming different genera, then different families, then orders, then classes, then phylums, then kingdoms. (ref 4)
One way of phrasing this is to say "diversity precedes disparity". That is, as minor differences accumulate (diversity), this will eventually lead to large-scale differences (disparity). Also, because the evolution is unguided, long periods of time are required to accomplish any major change.
In creation theory, organisms are created according to a basic "kind" (known technically as baramins). These organisms, being created by God, have built-in mechanisms for adaptation. Organisms can change rapidly, because the change is directed by internal response mechanisms.
A corresponding way to phrase this is "disparity precedes diversity". That is, God creates the basic kinds (disparity), which then branch out over time based on specific adaptive needs (diversity).
In evolutionary theory, the geologic column records great ages of time. In creation theory, the Paleozoic and Mesozoic represent Noah's flood, and the Cenozoic represents historical times after the flood. In evolutionary theory, only the last bit of the cenozoic represents historical time.
So, with these concepts in mind, let's take a look at the "Cambrian explosion". The "Cambrian explosion" is a period of time in evolutionary theory where most of the phyla came into the rock record. In the Cambrian, most phyla are represented. What does that mean? Well, whether or not evolutionists can identify supposed ancestors to the Cambrian phyla, the fact is that in the fossil record, diversity did not precede disparity, but rather the opposite - disparity came first.
Compare this to the last few million years of evolutionary time. How many phyla have come into existence in the last few million years? None. How many classes? None. How many orders? None. How many families? None. In the modern period, however, you have an amazing amount of diversity among organisms. (ref 1, ref 2)
So, it seems that there are two problems we can recognize. The first is that diversity DID NOT precede disparity. The second is that diversity does not produce disparity! Take a minute and let that last one soak in. As I mentioned, we have an incredibly diverse biosphere compared to what the fossil record shows. Yet, we have no major evolutionary changes occurring within 4 orders of classification in about the same time period as the cambrian explosion. So, not only does diversity not precede disparity, there is no evidence that diversity could produce disparity if it was there at all.
1) Davison, John A. An Evolutionary Manifesto. http://www.uvm.edu/~jdavison/davison-manifesto.html
2) Wilson, E. O. The Diversity of Life (chapter: Biodiversity Reaches the Peak)
3) Berkeley's Evolution 101: http://evolution.berkeley.edu/evosite/evo101/VIADefinition.shtml
4) Darwin's Origin of the Species, pgs 90-96.